Silver moving to the big time!!

Tomorrow the new silver ETF begins trading under the ticker SLV. Let's review the rationale for why SLV may be a potentially good investment:

1. The fed chairman today spent the day fretting about inflation in front of congress. This is likely his ammunition to continue to raise rates.
2. The value of the dollar continues to tank. When dollars aren't as valuable, the things consumers want get more expensive. From a technical standpoint the 50 day MA is now crossing over the 200 day MA for the dollar.
3. Silver has sold off considerably over the last week or so and is now sitting around an RSI of about 50. For investments with strong, longer-term upward trends (as silver has) buying at an RSI of 50 is typically rewarded with the continued strenth of the upward trend.

Putting the brakes on...

After several extremely strong days for gold and silver, today the metals got pounded. Silver was down almost $2! As the rise has been meteoric here in the metals, there is not a lot of support on the downside, save the psychologically important $600 level. I expect a recovery tomorrow with some weakness next week as the metals are still technically overbought. I'm thinking GLD is on its way back to an RSI of 50.

Another favorite of mine, PEIX, is looking like it could be breaking down. The MACD looks like it is going to cross any day now to the negative. I'd love to get this back around $22...keep your eye on this, the trading has been very volatile and the pull-back could be quick.


Corporate earnings have been very strong and today GOOG blew away the analysts with 60% growth...justifying the enormous P/E...not at all. I'll see you when GOOG is back at $150 after the markets come back over the next 2 years. I can't fathom an advertising company with a P/E of nearly 90. Anyways, you won't see me buying that stock any time in the near future.

Guess who's back...

Well I haven't exactly been good about keeping up with this but lets try it again...

One of the biggest problems I have noticed personally in my trading is the unwillingness to pull the trigger to lock in gains when stocks are overbought. I'm constantly trying to update my trading profile...how I find stocks to buy and sell. I try to go from a "top-down" approach. What are the major market trends currently? From there I attempt to identify companies displaying consistent technical signals indicating price direction.

Right now I think the major trend is inflation keyed by oil and energy. So, as far as industries go, I like the oils and precious metals. As for oil I'm waiting for a sell-off before the big summer run. I really like SU and PTR. Both have had excellent returns and both have decent dividends (making them strong long term holdings). As for the metals, I like a couple. Namely GG, SLW, RGLD, and USGL. USGL is the brainchild of the former CEO Rob McEwen from Goldcorp. USGL recently sold off due to some stock subscriptions granted at quite a discount to the current price. During long term trending markets I will typically look for stocks on my list with RSI's of 50 or lower and potential for a MACD crossover. I bought some USGL today at 8.19; I would have liked it at yesterday's price more but didn't have the cash to do it. I'll keep track of it and let you know when I unload.

A couple other stocks I'm interested in but waiting for better technical signals are: ADM, PEIX, DNA, CEO, CKCM and SNDK. Keep your eye on the RSI (below 50 or so) and MACD for the first 4. As for the last 2, wait for RSI 30 and an MACD cross.

Talk to ya soon!?